How is selling crushed pop tarts as cocaine is fraud? Isn't selling drugs a crime already? 
Because you are stealing money from someone with a lie if you do it, of course it's fraud. Do you think it's not really armed robbery if you use a toy gun? Bastard still gets off pretty easy, the fraud charges will likely end up as non-drug misdemeanor charges.
It's also a crime to buy drugs even if they turn out to be fake drugs, so any idiot besides the undercover cop who bought the crushed pop-tart as drugs and then complains about it would still get to go to court too.